MYL Analysis

Mylan N.V. (MYL)

Update 3/14/2017: MYL rose sharply after earnings were published and the declined beginning three days later. I exited at 15.6% of maximum potential profit, an early management of the position that evaded what looked to be a movement in the direction of loss. The price remains above the pre-announcement level.

Shares rose by 2.1% over 14 days or a 55% annual rate. The options position produced a 29.9% yield on debit for a +780% annual rate


 

MYL publishes earnings on Wednesday before the opening bell.

I shall use the APR series of options, which trades for the last time 52 days hence, on April 21.

Implied volatility stands at 39%, which is tripple VIX, a measure of the volatility of the S&P 500 index.

MYL’s IV stands in the 33rd percentile of its annual range and the 81st percentile of its most recent broad movement.

The price used for analysis was $41.47.

Premium: $3.71 Expire OTM iron fly
MYL   Odds Delta
Calls
Long 50.00 91.5% 11
Break-even 46.21
Short 42.50 59.3% 46
Puts
Short 42.50 40.6% 54
Break-even 38.79
Long 35.00 87.2% 10

The premium is 49% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered a position on MYL as described above. The stock at the time of entry was priced at $41.53.

By Tim Bovee, Portland, Oregon, Feb. 28, 2017

2 thoughts on “MYL Analysis

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s